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Sat 1 Mar 2008 02:14 PM

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Opec to stand firm over calls to raise output - poll

Group unlikely to heed consumer pleas despite record high prices, analysts say.

Opec to stand firm over calls to raise output - poll
STANDING FIRM: Opec unlikely to heed consumer pleas despite record high prices, analysts said. (Getty Images)

Oil exporters' group Opec is unlikely to heed consumer pleas to pump more oil, even though prices are near record high levels above $100 a barrel, a poll of analysts by newswire Reuters showed on Friday.

Ahead of next week's meeting of Opec on March 5 in Vienna, a Reuters poll of 15 analysts, traders and fund managers showed all respondents expected it to leave its formal output policy unchanged.

Some said Opec could allay consumer concerns by promising to add more oil if needed, and perhaps schedule another meeting in April.

"I think they will talk seriously about it [raising output] but are probably still leaning toward no change," said Adam Sieminski, chief energy economist at Deutsche Bank in New York.

Opec ministers have increasingly spoken in favour of no change in output in the run-up to Wednesday's meeting, although Iran and Venezuela have called for an output cut.

Some analysts said that, even if Opec decided to keep its formal output policy unchanged, it could informally begin to rein back output, given that demand for oil typically falls during the second quarter.

Opec has repeatedly said that the rise in the oil price, which hit a record high of $103.05 on Friday, has less to do with fundamentals than with inflows of speculative funds and the market remains well supplied while stock levels are comfortable.

"I... expect that in March and April there will be some informal trimming of supply... The informal trimming may amount in total to 500,000 barrels a day (bpd) from Jan-Feb levels," said Michael Wittner, analyst at Societe Generale. (Reuters)

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